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Rupee makes smart recovery; Rs 43.01 to US $

The rupee staged a smart recovery against the greenback and strengthened by six paise as the amendment passsed by the US Senate, for suspending all the economic sanctions for five years, boosted the market sentiment, at an active interbank foreign exchange market today.

The rupee opened steady at Rs 43.06/08 and remained at that level for sometime in the morning. But the news of the US Senate's decision later in the morning boosted the Indian currency which immediately started its rally.

Banks and corporates unwinded their over dollar positions expecting further appreciation of the rupee, while importers preferred to wait and watch.

The rupee touched the day's high of Rs 42.98 in the afternoon before closing at Rs 43.0050/0100, as against Rs 43.06/07 of the previous day, gaining about six paise.

Dealers said the amendment passed by the US Senate is very encouraging. If it becomes law, the World Bank will resume fundings of about $ 1.2 billion for the country's projects, which will agument the dollar inflows

. Forward premia eased on good receivings and lower paying pressure. Near forwards dropped by 1-2 paise while far-forwards declined by 5-6 paise. The sixth month and yearly annualised premia closed lower at 5.00 per cent and 5.84 per cent as compared to 5.22 per cent and 5.97 per cent of the previous day.

Cash/spot and cash/tomorrow finished at 1.25-1.50 paise premium and 0.25-0.50 paise premium respectively. The month-wise premium in paise were: June 7-8, July 22-24, August 41-43, September 58-60, October 78-80, November 98-100, December 118-120, January 147-149, February 170-173, March 195-198, April 218-221 and May 241-244.

Meanwhile, the Reserve Bank of India has revised the reference rate for the US dollar by three paise at Rs 43.02 as against Rs 43.05 of the pevious day.

In the cross currency, rupee appreciated marginally against pound sterling, euro and Japanese yen. Sterling ended at Rs 68.94 (69.09), euro at Rs 44.98 (45.12) and yen at Rs 36.09 (36.13).

At the call money market, the call rates ruled narrowly between 7.95-8.05 per cent during the day and closed steady at eight per cent.

UNI

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